Eat, Play, Love: Developing a strategy for infant products category growth for Danone in Moscow

Tatiana Sukhareva tatiana.sukhareva@yandex.ru +79160586985

Alena Ivanova alenus@gmail.com +79168199700

Anastasia Ryzhova anastacia.ryzhova@gmail.com +79160430993

Zhanel Kamakinova kamakinova@gmail..com +79857270271

2

Executive summary Target audience Relevant ideas Special offers

Sources:

250

300

350

400

450

2007 2009 2011 2013 2015 2017

tho

u.

per

son

s

fact forecast

Target audience Market share, %

28%

51%

Gross profit, thou rub

Net income, thou rub

0

100000

200000

300000

400000

500000

600000

2015 2016 2017

+123%

2015 2017

0

50000

100000

150000

200000

250000

2015 2016 2017

Our potential is…

Increasing of infant dairy products market

9 % +5-15%

2015 (fact) capacity

Curd

Kefir

Liquid Formula

+ 9

+ 37

+ 20

Sales increase in dairy infant food , %

Buyer’s portrait • Moscow citizen • age: 20-45 • middle-range earnings • has a baby

• Advertising on TV & social networks

• Sponsorship advertising • Amazing special offers • Promotion (commercial) costs

equipment

healthy features price-quality

WANTED

+55%

+75%

-69%

Trade channels Implementation

• Creation of a new product – Tyoma Liquid formula

• Developing new flavors for Tyoma’s curds

• Modernization in retail channels

• Concentration on priority positions in the segments

• Elimination of segments’ bottlenecks

Novation

Marketing strategy

Distribution

Our proposed measures will increase total sales in dairy products for children under three and double sales for Tyoma in Moscow by the end of 2017

1 Can be reached by… 2 Which will lead to… 3

team analysis

3

• family & friends

• store & package

• doctors • TV • Internet

healthiness

taste

naturalness

o Brand

o Price

(special offers) Loyal

& exacting

Buyer’s portrait: • Moscow citizen • age: 20-45

• middle-range earnings • has a baby

End customer’s portrait: age: 6 months – 3 years

• does not make a decision • in need of a special infant

nutrition

Sources2

corner shop (51%)

90

110

130

150

20072009 2011 2013 2015 2017

tho

u.

per

son

s

fact1 forecast

Births in Moscow

Number of potential end customers

250

300

350

400

450

2007 2009 2011 2013 2015 2017

tho

u.

per

son

s

fact forecast

Target audience

Market parameters fact

(2015) capacity

Average infant dairy product consumption for children under three in Moscow, ml per child per day

230 400-450

Increasing of infant dairy products market +9% +5-15%

Danone’s dairy products market share, % 28 50

To achieve the goal of doubling Tyoma’s sales by the end of 2017 it is necessary to increase Danone’s market share up to 50%.

The potential market growth depends on an inflation rate, which is decreasing gradually, a raising level of saturation, demography and economic.

The level of saturation is quite high, but can it be risen by promotion through mass-media, pediatricians, etc.

130

-18

0 c

m

hei

gh

t

Target audience Relevant ideas Special offers Executive summary

To double Tyoma’s sales within the limited market Danone should improve brand awareness, meet parents’ special offers requirements , pay attention to product quality , taste & accessibility

As a number of births is increasing, a number of potential customers will grow to 423 thou. persons (+2,7%) by the end of 2017 1 3 Adult chooses product for a baby,

appreciates quality, has to monitor prices

As a level of saturation and a market size can not be changed significantly, Tyoma should capture 50% of market to reach the goal 2

Sources:

Trade channels Implementation

1 – Russian statistical annual (2014), 2 – Data from Nielsen, Trends in the Global Baby Food and Diaper Markets (2015)

4 Sources:

Executive summary Target audience Relevant ideas Special offers

Curd

Drink Yoghurt

Kefir

Liquid Formula

Milk

Yoghurt

Segment Category's share, %

Sales increase, %

Commentary

53

14

14

4

13

2

- 2

+ 9

+ 37

- 13

+ 20

+ 2

High-demand product

Demand saturation, sales growth

Potentially attractive segment with a strong sales growth

Stable small increase

Not in demand

Decrease in demand

Price-quality ration

Whole natural product

Child’s favorite taste

Target audience prefer to buy inexpensive natural products with their favorite flavors

Key factors Needs

Safe ingredients

Products’ diversity

Customer

case data, team analysis, Nielsen, 1 – Appendix #1, 2 – Appendix #2, 3 – Appendix #3

1 3

2 Increasing of the curds’ flavors in dairy infant food category and production of a Tyoma “Liquid formula” meets the main requirements of the target audience

Promotion channels of the Tyoma’s products allow to increase brand awareness

Channel Promotion way Reach3,%

TV

Internet

Hospital

TV-commercial, Sponsorship advertising (health programs)

Advice for an infant balanced food on YouTube & VK groups

Tyoma products’ posters, doctors recommendations

81

68

Cu

rd n

ov

ati

on

N

ew p

rod

uct

2

TYOMA Curd

TYOMA Liquid Formula

Main competitors New flavors1

Characteristics

AGUSHA

apple & banana

mixed fruit

cereals

vanilla & strawberry

For aged 6 months and more

without oils and preservatives

Convenient takeout pack

without allergic flavors

200 ML Tetra Pac

Healthy & safe product proteins & min shelf-life

Adding to Tyoma’s line a Liquid formula, flavors’ extension meet the main customers needs and special promotion channels will allow to increase brand awareness

Inexpensive ~ 30 RUB

FRUTO - NYANYA

N/A

Low price range

Trade channels Implementation

5 Sources:

Executive summary Target audience Relevant ideas Trade channels Special offers

-60 -40 -20 0 20 40 60 80

Curd*

Drink yoghurt*

Kefir*

Liquid formula

Milk

Yoghurt

Moscow Hyper/Supermarkets Moscow Superettes Moscow TT and Specialists Moscow Market

%

The CATMAN helped to understand the main priority positions of dairy products for children under 3 years old for future promo and bottlenecks to be got rid of

In 2015 Specialized stores1 demonstrated the biggest increase

in sales of prioritized segments (*) among all types of stores 1

1. Children stores (e.g. Detskiy Mir, Korablik, Dochki-Synochki), Drugstores, Markets

case data, team analysis, СATMAN manual

The CATMAN analysis revealed the priorities of each segment

It’s worth excluding all bottlenecks that has a market share less than 1% and exceeds a cumulated share 95% 3

Curd

Hyper/Supermarkets

Superettes

TT and Specialists

Drink yoghurt Kefir Milk

2

Milk 3,2 % Classic, 5% Green apple, 2,8% Biolact, 3,2% Flavor

Curd

Drink yoghurt Kefir

Kefir, 3,2%

Kefir, 3,2%

Kefir, 3,2%

• Biscuit

• Pomegranate

• Pear-apple

• Prune

Hyper/Supermarkets • Prune • Prune-banana-

apricot

• Prune; • Prune-banana-

apricot; • Apple-carrot-

prune

• Strawberry-banana;

• Apple-carrot • Apricot • Prune-banana-

apricot • Prune

Implementation

6

Get a magnet photo frame

Buy some get some free

91%

62%

Buyers when choosing a product guide price

Buyers when choosing a product guide promo

HM SM HDS AFH Proxi

special format / product

discount

gift

more for your money

buy and get one for free

tasting

Buy some earn discount

Every fourth curd

for free

Take second

with 25%

discount

For those who choose new product - Tyoma Liquid Formula (available for two months)

curd ~ 600 thou units/packs

kefir ~ 250 thou units/packs

Trolley -advertising will increase brand

awareness

N

E

W

P

R

O

D

U

C

T

+50% promotional products sales

+20% segment growth

Я

В

Ы

Б

И

Р

А

Ю

М

А

М

А

О

Д

О

Б

Р

Я

Е

Т

S

P

E

C

I

A

L

O

F

F

E

R

S

Executive summary Target audience Relevant ideas Special offers Implementation

case data, team analysis, Nielsen, Danone promo management Sources:

Trade channels

It is expecting a 50% growth of promotional product sales and 20% segment increase

Most Russian women became more attentive to special offers and discounts on infant foods

1 Planogram of Tyoma’s diary products for children under 3 years old

According to sales increase curd & kefir are the best products for using in special offers

3 2

7

Executive summary Target audience Trade channels Implementation Relevant ideas

Sources:

Special offers

Initiatives Costs, mln 2016 2017

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

Creation of a new product – Tyoma Liquid formula

Developing new flavors for Tyoma’s curds

Distribution of the liquid formula though retail channels

Distribution of the curds with new flavors through retail channels

Modernization in retail channels

Advertising on TV & social networks

Sponsorship advertising

Offer “Buy some get some free”

Offer “Buy some earn discount”

Offer “Get a magnet photo frame”

30

10

250

team analysis, 1 – Appendix #4

0

200 000

400 000

600 000

2016 2015

+49%

2017

504 568 351 432

226 228

0

50 000

100 000

150 000

200 000

250 000 +19%

2015 2016 2017

241 254

46 745

168 983

Gross profit1, thou rub Net cash flow1, mln rub

Realizing the model of promotion and sales will help to double sales for the Tyoma brand in Moscow by the end of 2017

8

ALENA IVANOVA Plekhanov RUE Faculty of Mathematical Economics, Statistics and Informatics SIBUR Intern, Business

development

HQ 25% Changellenge Cup Moscow 2015

TATIANA SUKHAREVA Plekhanov RUE Faculty of Mathematical Economics, Statistics and Informatics HQ 25% Changellenge Cup

Moscow 2015

ZHANEL KAMAKINOVA

Plekhanov RUE Faculty of Mathematical Economics, Statistics and Informatics ECO Solution Cup 2016

winner

Plekhanov RUE Faculty of Mathematical Economics, Statistics and Informatics

ANASTASIA RYZHOVA

BROUGHT TO YOU BY

9

APPENDIX

10 Sources:

APPENDIX #1: New curds’ flavor opportunities

9%

9%

9%

8%13% Value, %

OTHERS APRICOT & CARROT MIXED FRUIT APPLE & BANANA

27%

Units, %

21% 12%

20%

PEACH CEREALS

VANILLA &

STRAWBERRY

9% 13% 13% 28%

10%

case data, team analysis

11 Sources:

APPENDIX #2: Competitors’ analysis in liquid formula segment

Age Product Weight, ml Price, rub Ccal* Proteins*, gr Disadvantages

> 6 months

NAN-1

AGUSHA 204

2*200

~ 30

110-120

135

268

2,9

5,0

Composed of fat oils

Expensive, too big weight, composed of preservatives

case data, team analysis

* - for the whole product

12 Sources:

APPENDIX #3: Coverage calculation

Channel Initiative Type TA share Total reach

TV

Sponsorship advertising

Tabletka 0,10

0,31

0,81

O samom glavnom 0,12

Zhit zdorovo 0,14

Ads (prime-time) Pervy kanal 0,30

0,72 STS-Media 0,60

Internet

VK theme groups

Children 0,65

0,54

0,68

Child Nutrition 0,85

Family and children 0,81

YouTube theme channels 0,31 0,31

team analysis, TNS data, YouTube Statistics, VK statistic

13 Sources:

APPENDIX #4: Computations

team analysis